BJ
BJ's Wholesale Club Holdings, Inc.
$86.64
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 37.8% below fair value
You pay
$86.64
Bear
$114.70
Fair
$139.28
Bull
$163.86
Bear
$114.70
+32.4%
$4.44 × 28x P/E
Fair
$139.28
+60.8%
$4.44 × 34x P/E
Bull
$163.86
+89.1%
$4.44 × 40x P/E
Key Value Driver
Normalized P/E multiple (34x base case)
Implied Market Multiple
19.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $104.67 from 27 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $139.28 per share.
Warnings
Wall Street's average price target is $104.67 (from 27 analysts). Our estimate is 44% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples